3i Group plc · LSE:III
3i — Shareholder Meeting (June 2022)
37 slides from 3i's shareholder meeting presentation, Jun 30, 2022
Slide 1: Annual General Meeting
Annual General Meeting 30 June 2022
Slide 2: Introductory remarks
Introductory remarks David Hutchison Chairman
Slide 3: Today's agenda
Today’s agenda Introductory remarks David Hutchison Review of the year Simon Borrows Our ten-year track record Simon Borrows Q&A David Hutchison Formal business including Resolutions David Hutchison
Slide 4: The Board of Directors and General Counsel
The Board of Directors and General Counsel David Hutchison Stephen Daintith Caroline Banszky Coline McConville Alexandra Schaapveld Kevin Dunn Simon Borrows Julia Wilson James Hatchley Jasi Halai Lesley Knox Peter McKellar 4
Slide 5: An excellent result exceeding our financial targets
An excellent result exceeding our financial targets Year to 31 March 2022 Group Private Equity Infrastructure Total return NAV Gross investment return Gross investment return on equity per share 47% 21% 44% 1,321p Proprietary capital invested Cash income Gearing Total dividend £529m1 £91m per share
Slide 6: The Group delivered strong results against a challenging backdrop
The Group delivered these strong results against a very challenging macro-economic and geo-political backdrop 6
Slide 7: The Group has a clear, consistent strategy
The Group has a clear, consistent strategy that continues to be well executed, generating attractive and sustainable returns for shareholders 7
Slide 8: Total dividend set at 46.5 pence per share
Total dividend set at 46.5 pence per share • Our dividend policy aims to maintain or grow the dividend year-on-year subject to: − maintaining our conservative balance sheet strategy − careful consideration of the outlook for investments and realisations and market conditions Second FY2022 dividend o
Slide 9: Review of the year
Review of the year Simon Borrows Chief Executive
Slide 10: Our purpose
Our purpose We generate attractive returns for our shareholders and co-investors by investing in private equity and infrastructure assets. As proprietary capital investors we have a long-term, responsible approach. We create value through thoughtful origination, disciplined investment and active man
Slide 11: How we deliver our purpose
How we deliver our purpose Permanent capital A long-standing network An experienced and diverse team Careful portfolio construction Rigorous portfolio management Strong values and institutional culture A strong brand and reputation 11
Slide 12: Thematic approach to investment
Thematic approach to investment We back businesses that benefit from long-term structural growth trends Demographic and social Climate change and Challenges to globalisation and the economic order change resource scarcity Value for money Internationalisation Digitalisation, technological disruption
Slide 13: Advancing our sustainability agenda
Advancing our sustainability agenda Significant progress in FY2022 Governance Environment Social • New ESG Committee set up • Completing process of GHG • Engagement of DE&I to advise the Chief Executive emissions data collection from consultant to identify areas portfolio for further improvement • R
Slide 14: Private Equity: Excellent performance in FY2022
Private Equity Excellent performance in FY2022 Excellent performance across the portfolio • 47% gross investment return, predominantly earnings driven • 93% of portfolio growing earnings in the 12 months to December 2021 Good level of investment activity and strong cash generation from the portfolio
Slide 15: Private Equity: Strong earnings growth across the portfolio
Private Equity Strong earnings growth across the portfolio Portfolio earnings growth of top 20 PE investments1 ≥ 30% £7,165m (Action) £1,059m 8 companies 20 - 29% £269m 1 company 10 - 19% £1,254m 3 companies 0 - 9% £1,453m <0% £777m 1 Includes top 20 Private Equity companies by value. This represent
Slide 16: Private Equity: Portfolio value growth of £3.5bn
Private Equity Portfolio value growth of £3.5bn predominantly performance driven Largest value increases (>£20m)1 Largest value declines (>£20m) Portfolio Value Value at Driver of value Portfolio Value Value at Driver of value company growth 31 Mar movement company decline 31 Mar movement (excl FX)
Slide 17: Action – strong 2021 performance despite Covid disruption
Private Equity Action – strong 2021 performance despite continued Covid disruption +23% +36% +11% 93% 267 1,983 Sales growth EBITDA growth LFL growth Cash conversion Net new stores Total stores An unbroken high growth track record Expansion across Europe continues1 EBITDA (€m) Netherlands Poland 401
Slide 18: Action – update
Private Equity Action – update • Q1 trading: net sales of €1.8bn (42% increase vs Q12021), 28% LFL sales, LTM EBITDA of €932m • Q2 trading: good P4 to start Q2 • Store openings: 4 pilots opened in Spain so far, on track to open more stores in 2022 than last year • Outlook: on track for another year
Slide 19: Value creation | SaniSure (2019)
Private Equity Value creation | SaniSure (2019) £277m value Built up the platform through acquisitions • Platform created by combining four complementary companies within nine 3.7x money multiple1 months of ownership • Scaled organically and with three further acquisitions Significant further growth
Slide 20: Value creation | BoConcept (2016)
Private Equity Value creation | BoConcept (2016) £184m value Improved store base and accelerated store expansion • Expanded and repositioned store base with +70 net new stores opened 2.4x money multiple1 • Strengthened the franchisee base, resulting in a significant decline in the number of store cl
Slide 21: Value creation | nexeye (formerly Hans Anders, 2017)
Private Equity Value creation | nexeye (formerly Hans Anders, 2017) £345m value Significant expansion, organically and through acquisitions 1.8x money multiple1 • Acquired eyes+more in Germany and Belgian franchisee for eyes+more • Expanded store base, particularly in Belgium and Germany Significant
Slide 22: Good level of new investment in a challenging environment
Private Equity Good level of new investment in a challenging environment… £69m proprietary capital £53m proprietary capital £46m proprietary capital investment investment investment £87m proprietary capital £43m proprietary capital £37m proprietary capital investment investment investment 22
Slide 23: Continued bolt-on investment activity
Private Equity …supplemented by continued bolt-on investment activity + + + + Cardea Catheter Innovations + + + + + + + + JATech Services Eyes! NV GL Engineering 23
Slide 24: Our Private Equity portfolio is increasingly cash generative
Private Equity Our Private Equity portfolio is increasingly cash generative Full and partial realisations Refinancings Distributions Magnitude £346m BoConcept £73m Action £284m Basic-Fit £146m Royal Sanders £80m1 nexeye £19m BoConcept £17m SaniSure £59m Tato £14m Other £28m Wilson HCG £10m Other £10
Slide 25: Infrastructure: Making progress on strategic initiatives
Infrastructure Making progress on strategic initiatives Strong performance across portfolios • 21% gross investment return, with strong performance across investment vehicles and assets • 17% increase in 3iN’s share price in the year • US infrastructure portfolio continues to perform well Good contr
Slide 26: Our ten-year track record and outlook
Our ten-year track record and outlook Simon Borrows Chief Executive
Slide 27: Our strategic transformation
Our strategic transformation Consistent execution of a clearly defined strategy over the last 10 years 2012 2022 • 472 employees in • 236 employees in 19 offices1 7 offices • 1.7% operating cost/AUM • 0.6% operating cost/AUM Overhaul of • Defined market and asset • Debt management processes and grou
Slide 28: Our ten-year track record
Our ten-year track record Strong value creation for shareholders NAV per share (GBP) £10.1bn NAV growth 13.2 +17% CAGR since FY2012 9.5 7.2 8.2 8.0 6.0 4.0 4.6 2.8 3.1 3.5 FY121 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Dividend per share (pence) £2.5bn dividends paid to shareholders FY2013–
Slide 29: Outlook
Outlook 3i can continue to deliver strong returns in the future Permanent capital, long-term approach Proven model, underpinned by robust processes and price discipline Thematic approach to investment, with exposure to long-term secular growth trends Resilient portfolio, positioned to withstand curr
Slide 30: The Resolutions
The Resolutions David Hutchison Chairman
Slide 31: Resolutions commentary
Resolutions commentary • 17 ordinary resolutions • 4 special resolutions • Normal annual business 31
Slide 32: Poll card
Poll card AGM poll card The Board recommends you vote FOR resolutions 1 to 21 Resolutions For Against Abstain Resolutions 7 Toreceive and consider the Company's Accounts for the year to 31 March 2022 and the Directors’ and Auditor's reports. To approve the Directors’ remuneration report Against Abst
Slide 33: Resolutions 1 - 4
Resolutions 1 - 4 1. That the Company’s accounts and the reports of the Directors and the Auditor for the year to 31 March 2022 be and are hereby approved 2. That the Directors’ remuneration report for the year to 31 March 2022 be and is hereby approved 3. To declare a dividend of 27.25p per ordinar
Slide 34: Resolutions 5 - 9
Resolutions 5 - 9 5. That Mr S A Borrows be and he is hereby reappointed as a Director of the Company 6. That Mr S W Daintith and he is hereby reappointed as a Director of the Company 7. That Ms J H Halai be and she is hereby reappointed as a Director of the Company 8. That Mr J G Hatchley be and he
Slide 35: Resolutions 10 - 14
Resolutions 10 - 14 10. That Ms L M S Knox be and she is hereby reappointed as a Director of the Company 11. That Ms C L McConville be and she is hereby reappointed as a Director of the Company 12. That Mr P A McKellar be and he is hereby reappointed as a Director of the Company 13. That Ms A Schaap
Slide 36: Resolutions 15 - 21
Resolutions 15 - 21 15. That the Board be and it is hereby authorised to fix the Auditor’s remuneration 16. To renew the authority to incur political expenditure 17. To renew the authority to allot shares 18. To renew the Section 561 authority 19. To give additional authority under Section 561 20. T
Slide 37: Slide 37